Ooredoo Expands Mobile Money Services
Qatari telecoms incumbent Ooredoo has expanded its mobile money service to enable remittances to be sent directly to Philippine bank accounts. The development reflects the large Filipino population in Qatar, many of whom send funds home to family. On Ooredoo's part, the new service will generate transactional revenues but will also benefit the Filipinos receiving the remittances, enabling faster access to cash and encouraging greater usage. BMI believes Ooredoo's presence across the Middle East offers potential for such services to expand.
|Remittances Drive Mobile Money Transactions|
|Remittances To The Philippines (USD'000)|
Remittances account for a significant proportion of the Philippines' economy, making up 8.5% of the country's real GDP. Any improvement to getting remittances into the country is certainly a boost for the local economy, and also for the banks receiving the funds. Remittance growth supports private consumption expansion, generating growth in the economy. BMI forecasts real private consumption growth at 5.3% in 2014 and contribute 3.7pps to GDP growth. Filipinos living in Qatar sent USD412.4mn in remittances to the Philippines in 2013, up 28.24% on 2012 remittances from the country. Qatar's strong real GDP growth outlook supports Ooredoo's decision to improve its mobile money services for remittances.
The ease and speed of mobile money services in providing remittances is likely to encourage Philippine banks to partner with more mobile operators in the Middle East with the UAE and Saudi Arabia key target markets. These two countries account for the largest share of remittances from the Middle East to the Philippines. Ooredoo does not operate in these countries, but has a presence in other regional mobile markets accounting for around USD750mn in remittances in 2013. The success of Ooredoo's move will encourage greater interest in the remittance market, as operators can undercut traditional remittance transfer companies such as MoneyGram. BMI notes a growing interest in mobile financial services for mobile operators as they seek to build revenues from new services.
Ooredoo already has plans to expand the number of countries that remittances can be sent to, emphasising BMI's view that remittances are a key part of the international mobile money ecosystem. We believe users in Qatar will be keen to take advantage of the relative ease of making transfers and the service will prove popular as long as costs remain competitive.